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Vacation Rental Pricing

The growth of vacation rental properties has seen record popularity in the last decade. Pricing expert from Simon Kucher & Partners and #PPSDALLAS18 Pricing Workshop leader Dylan Vest shares insight for property owners in this guest blog post about the vacation industry's intersection with pricing strategies. In recent years, sites like VRBO and Airbnb have made it easier than ever before to connect property owners and investors to aspiring vacationers. Unfortunately, the same tools are creating a glut in the market for short-term rentals as anyone with an extra bedroom is taking a shot at this seemingly easy “side-hustle”. If you’re serious about building a profitable rental business, there are a few pricing considerations throughout the three major phases of the transaction that might just help fund your own vacation.
Preparing your listing
Before your listing goes “live” you need to answer two major questions that will inform your basic price structure:

What value are you providing and what is your objective?

The base rate of the rental will ultimately be determined by what value you’re delivering. It’s not just about having a newly renovated IKEA kitchen or an ocean-front view. Do you have a fenced in yard that would save someone the cost of boarding their dog? Are you close to the airport, which might save a prospective tenant an hour (and Uber fares) on each leg of their trip? Consider these elements when developing a base rate and don’t just price based on comparable rentals in the area. The minimum rental period is a great way to boost revenue without raising the price, but it will also be guided by your overall objective. If maximizing revenue is your objective, then keep the minimum stay length at one day; if you’re willing to sacrifice some occupancy for less turnover-related work, consider extending it to three to five days.

Increasing the minimum booking length can improve overall profitability.

Going "LIVE"
Once a base rate is established, two major factors will serve as inputs to the final customer price: demand, about which I’ll discuss a combined approach, as well as services-related fees. Seasonal demand will be a major price driver for almost every vacation rental out there. Most people vacation in the summer, so in many situations it will make sense to price May-September at a higher multiple of your base rate, but this isn’t always the case. Consider the average Appalachian Mountain cabin, for which demand peaks with the fall foliage color. Local events can have an acute effect on demand for specific days on the calendar and should be priced accordingly. Step one is identifying the key events for the year, and step two is ensuring that the days leading up to and following the event are adjusted properly. Tip: Hosts often want to block out dates for themselves to use a particular rental during parts of the year. Instead of blocking the date, consider raising the price to a level that would cause you to reconsider your own plans. This is the same logic as Zillow’s “Make me move” price. Charging a cleaning fee is the industry standard. This covers the cost of getting the property ready for the next tenant and should be a part of all rental transactions. Additional services and associated fees can be a great way to offer an added value to the customer at a higher cost. In the pricing industry, we call this “maximizing willingness-to-pay.” Allowing a pet to stay at the house with an additional fee is a service that serves to eliminate the need for boarding. Charging a fee for additional guests beyond a stated capacity is a service that prevents people from needing to book a second hotel room or house nearby. Understanding, defining and charging properly for these services can have a tremendous impact on your bottom line.

Smart fee inclusion can drastically boost overall revenue (% from an actual portfolio property in 2018)

The follow-through
Before the first guest arrives, consider the following tools to protect you from additional incurred costs, minimize churn of high-quality guests, and maximize long-term pricing potential. Security deposits are designed to cover just about anything done by the tenant that leads to additional work or causes damage. At the very least, be sure that you include “inspect for damage” in your cleaning service’s to-do list and when you find it, charge for it. You may also consider specific charges for a sink full of dirty dishes or failure to take out the trash. Rebooking discounts on a future vacation is a great way to lure customers back next year, but don’t give it away too easily. Consider offering a 10% discount for a review online, an above average length stay, or a booking during the offseason. In 2018, reviews and ratings build a brand. These reviews can have a tremendous impact on the long-term success of your rental. Provide a hard copy means for providing feedback such as a guest log, and request that users cite at least one potential improvement here. This will give tenants a forum for complaints without having to post it via a public review. Oh yeah, listen to - and act upon - the feedback! About the Author: Contact Dylan directly about this article and his upcoming appearance during #PPSDALLAS18 via email: Dylan.vest@simon-kucher.com Dylan Vest will be leading a workshop during our 29th Annual Fall Pricing Workshops and Conference event in Dallas, Texas titled "Getting Your Customer Pricing Right" on Tuesday, October 23.

Read the Workshop details below and click the image to learn more! www.simon-kucher.com:

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11 Reasons To Visit Miami

This Spring we're heading to Miami, Florida for the 28th Annual Spring Pricing Workshops and Conference event. It's going to be an incredible time -- learning, networking and growing businesses in the city of Miami! We found 11 convincing reasons to visit this sunny city, not that Miami needed much help. Read below and book your ticket today! Originally posted at CVent.com: 11. The NEW Miami Beach Convention Center (MBCC) A $500-million state-of-the-art transformation brings 500,000 sq. ft. of exhibit space, a 60,000 sq. ft. ballroom, just 12 miles from the airport and walking distance to dining, shopping and cultural events. Learn more about the Miami Beach Convention Center transformation. 10. Accommodations Rest your head or catch up on email at the New Miami Beach Convention Center Headquarter Hotel, an Art Deco hotel, cozy boutique property or luxury resort. Choose ocean views or city sunsets. Accommodations in Greater Miami come in every shape and size. Service with a smile is the common denominator. 9. World-Class Airport Miami International Airport (MIA) has more than 100 airlines and offers 150 inbound direct flights daily, along with onsite car rental and rail connection to Downtown Miami. MIA has more flights to Latin America and the Caribbean than any other U.S. airport — and it’s just 20 minutes away from the Miami Beach Convention Center and most hotels. 8. Great Weather Miami’s annual average temperature is 74◦F (23◦C). Year round, you can hit the beach. Or dine at an outdoor café. Or go for a sunset sail. Or snorkel in Miami Beach. Enough said. See current conditions and average monthly temperatures. 7. Cutting Edge Technology With top quality medical care, technology, and access to medical experts and cutting-edge research programs, Miami is the ideal choice for any medical meeting needs. Academic medical excellence meets innovation at Mount Sinai Medical Center on Miami Beach. Live procedures will be viewable via a closed-circuit hospital link at the new Miami Beach Convention Center. 6. Stellar Service GMCVB’s Convention Services Team provides complimentary Site Selection Assistance, Business Services Referrals (caterers, decorators, housing reservation services, speakers, staffing services and transportation) and Destination Materials (maps, pocket guides, digital images and promotional video). 5. Where the World Meets Increase your attendance by hosting your Meeting in Miami – the gateway to Latin America. Miami is fast becoming a technology hub for tech startups, finance, banking and established companies who are attracted by its international flavor and easy access to Europe, South and Central America and the Caribbean. 4. Arts & Culture The Art Deco Historic District, The New World Symphony, Art Basel, Pérez Art Museum Miami (PAMM), Patricia & Phillip Frost Museum of Science, Wolfsonian-FIU and Jewish Museum of Florida are but a small sampling of Miami’s rich arts and cultural offerings. Catch a show at Adrienne Arsht Center for the Performing Arts or a sporting event at AmericanAirlines Arena. 3. Shopping Miami Beach boasts lively Lincoln Road, hip boutiques along Washington and Collins avenues and charming shops along Española Way. Minutes away from the beach, Miami Design District is one of the city’s newest retail hot spots. From South Beach to the suburbs, Miami is a shopper’s paradise. 2. Sports Cheer for the Miami HEAT, Miami Dolphins and Miami Marlins while you’re in town. Golf, tennis and water sports (jet ski, kayak, standup paddle boarding) are everywhere, and major sporting events like the Miami Marathon, Miami Open and World Golf Championships-Cadillac Championship Doral take place year round. Grab a quick round at the beautifully manicured Miami Beach Golf Course. There is no shortage of sporting activities and events in Miami. 1. #PPSMIA & #PPSLAS Spring Pricing Workshops and Conference Events! Registration is open for the 28th Annual Spring Pricing Workshops and Conference event in Miami, Florida! Of course the event of the season is the number one attraction in the city! For more details, visit: Pricingsociety.com/Conferences.

Click on the images below for more Conference information

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5 Reasons To Book: The Loews Chicago O'Hare Hotel

We're preparing for our Annual Spring Pricing Conference and Workshops event and this year, we're heading BACK to Chicago! If you've never visited the great city of Chicago, you must add it to the travel list! Endless attractions, breathtaking architecture, city events, delicious restaurants and of course...shopping (just try not to spend on the Magnificent Mile). The #PPSCHI18 event will be held at the luxurious Loews O'Hare Chicago, and we're excited to return to the host hotel. Here are five (5) great reasons to book a room for your team: 5) World-Class Shopping - Two blocks from the Loews Chicago O’Hare Hotel are over 130 designer outlets, including staples like Bloomingdale’s, Neiman Marcus and Saks Fifth Avenue. Also, The Fashion Outlets of Chicago is also home to world-class brands like Gucci, Prada, Tory Burch, Michael Kors and Burberry.   4) Exclusive Dining @ The Rural Society - Warm hospitality, and welcoming decor transport guests from the modern lines of the hotel to the sweeping cattle ranches and grill-fired kitchens of Argentina. Rural Society is a contemporary Argentine steakhouse with nationally renowned master of Latin cuisine Chef Jose Garces. Inspired by his travels to South America, Rural Society is at once rustic and luxurious, bringing the energy and sophistication of Buenos Aires to Chicago. 3) Newly Redesigned Spaces - The Art Gallery has been redesigned and remodeled for a one-of-a-kind guest experience! View famed artwork from celebrated artists around the globe classic framed pieces, hanging sculptures, a green rooftop covered in soil and wheatgrass, and even wind-powered electricity. 2) Rosemont Entertainment District - Minutes away from the hotel is the famed entertainment and attraction hub the MB Financial Park at Rosemont. A 200,000 square-foot entertainment and dining complex that opened 2012 is home to 12 venues offering upscale international cuisine, live music, comedy, state-of-the-art film, bowling and more. This new entertainment district is a one-stop suburban destination for big city dining, entertainment, nightlife, and family fun. 1) Convenience - We're just minutes from the Chicago O'Hare airport, complete with a 24-hour shuttle to transport guests. Only a mile away is the large intersection connecting to all the major highways. Oh, and all of the Pricing Workshops, Tracks, and Conference Breakout sessions are going to be held right in the hotel, convenient throughout the week. Take advantage of all Chicago has to offer - by booking the best rooms during #PPSCHI18!

Register HERE for the Pricing Conference and Workshops - take advantage of the EARLY BIRD special!

At the Loews Chicago O'Hare Hotel, guests have the best of both worlds.Don’t choose between downtown energy and the convenience of being five minutes (2.6 miles) from the Chicago O'hare International Airport. If your group is looking to extend the stay and explore more of the city, there's a special Group rate available 3 days before and/or after the conference. [gallery link="file" size="medium" ids="https://cdn.shopify.com/s/files/1/0182/3165/6512/files/2859-836d42d4c0bc81987b046bf5ffc772a4.jpg|,https://cdn.shopify.com/s/files/1/0182/3165/6512/files/5617-295192dca8d2563883e7face03884834.jpg|,https://cdn.shopify.com/s/files/1/0182/3165/6512/files/3334-4722e69233419d9c2b423cc85aef0809.jpg|,https://cdn.shopify.com/s/files/1/0182/3165/6512/files/5618-8e2727f727cdef830baaf6a6500d23f3.jpg|,https://cdn.shopify.com/s/files/1/0182/3165/6512/files/5619-6c0fd12871eafd24b1a3385307ba4732.jpg|,https://cdn.shopify.com/s/files/1/0182/3165/6512/files/347-f27270407fb08c8f41938c055790a590.jpg|,https://cdn.shopify.com/s/files/1/0182/3165/6512/files/2881-5bf2cd936f2aa213bb2d670805af9cb3.jpg|,https://cdn.shopify.com/s/files/1/0182/3165/6512/files/5610-0838ea2a03768da417c2c66922dc4d3c.jpg|,https://cdn.shopify.com/s/files/1/0182/3165/6512/files/5607-b0de0af628b13c5e6bd90ede906ce587.jpg|,https://cdn.shopify.com/s/files/1/0182/3165/6512/files/3330-c82901c9b52e4ff0215fce85cbcabadf.jpg|,https://cdn.shopify.com/s/files/1/0182/3165/6512/files/3328-093fb29a17aa2f1dd9505f6b5f075ea7.jpg|,https://cdn.shopify.com/s/files/1/0182/3165/6512/files/5611-0513463296365c9d793ba7ddde497b18.jpg|"] Whether you’re looking for the convenience of Rosemont’s great entertainment, dining and shopping – or the iconic attractions of downtown Chicago, it’s all easily accessible from Loews Chicago O’Hare Hotel. Reserve your room: https://www.loewshotels.com/chicago-ohare/pps-spring-conference-2018 Remember the Pricing Workshops and Conference event in Chicago 2016: View photos on our Facebook page!

Follow #PPSCHI18 across social media for Conference updates!

We'll see you in Chicago!

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Save The Date: Chicago May 2016 #PPSCHI

Save-the-date #PPSCHI 2.0

Announcing the 27th Annual Spring Pricing Workshops and Conference in Chicago, IL May 3-6 2016!

#PPSCHI Early BirdButtonRegister TODAY for the pricing event of the season!
  • Over 40 Speakers
  • Over 100 Hours of Exclusive Content
  • 13 CPP Workshops
  • CPQ, Sales, Operation Breakout Tracks & MORE!
  • Full Lineup TBA
    PPS Chicago 620x350 Web Banner For more information, questions or registration help, please visit PricingSociety.com.

We'll see you in Chicago! #PPSCHI

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#PPSSF - Conference Recap

We had an amazing time in San Francisco during the 26th Annual Pricing Workshops and Conference! During October 20-23 over 450 attendees packed Workshops, Breakout Sessions, the Executive Summit, Networking Receptions, Keynote Addresses and more. We have the Recaps. PPS captured the memories via Social Media by sharing Tweets, pictures, and live video on Periscope. Keep reading to take a look at the team, attendees, Speakers, Workshops and city sights from our Fall Pricing Conference Workshops! Click the images and links below for more #PPSSF! Check out the Tweets - a collection of #PPSSF Tweets throughout the week of Workshops and Conference! Follow @PricingSociety on Twitter! WATCH the Periscope videos from the PROS Reception, Sponsor Hall, and more on our You Tube Channel! Click the image below to view the Playlist. PPS On Periscope Follow @PricingSociety on Periscope for more #PricingScopes and notifications of new, live videos. The entire #PPSSF Photo Gallery is live on Facebook! View photos from our great time in San Francisco HERE.
#PPSSF was another info-packed pricing event featuring the leading pricing experts from around the world! We hosted 11 Workshops, an Executive Summit, Keynote presentations and a host of breakout tracks including the all-new CPQ track which was a huge success. Each evening was packed with networking and sharing best practices with pricing peers- we truly love connecting our pricing folks! - Lisa Miles-Atkins, Director of Key Accounts @ The Professional Pricing Society
A special thank you to our team in San Francisco, our Sponsors, members, the hotel staff and everyone and location that worked to make #PPSSF such a success! We had a wonderful time and look forward to returning! Save-The-Date NOW for our Spring Pricing Workshops and Conference 2016... in CHICAGO!! (Click the link) Continue reading

The 2015 Fall Pricing Workshops and Conference In San Francisco

PPS is heading to San Francisco!

PPS SF 620x350 Web #293AEEB

Announcing our 26th Annual Pricing Workshops and Conference in San Francisco, California! Join the Professional Pricing Society October 2o - 23 for an amazing event in the Pricing Industry! We have an exciting lineup of Keynote Speakers and Workshop leaders, networking, events, and more for our attendees. Enjoy an exceptional mix of pricing professionals, industry knowledge, and city exploration in beautiful San Francisco, California! sfo2015-960x250-website-eb Check out our Buy-2-Get-1 FREE Special for Pricing Professionals interested in education certifications and designations. lux373ex.49083_lg This year's host hotel is The Palace Hotel. Room specials are going on now! Contact us for more information! *Currently our Main site, PricingSociety.com is experiencing technical difficulties. However, you can STILL register for our upcoming Fall Pricing Workshops and Conference in San Francisco #PPSSF! The deadline to book a discounted rate at The Palace Hotel San Francisco is THIS FRIDAY!

Reach us directly:

Call - 770.509.9933 or Email: Cherica@PricingSociety.com.

We look forward to speaking with you and apologize for the temporary inconvenience. Follow the hashtag #PPSSF across social media for all things Fall Pricing Workshops and Conference in San Francisco related. See you on the West Coast!  Continue reading
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